Vientiane hotel closes doors

VIENTIANE, 17 January 2019: Vientiane’s first ever hotel branded by an international hotel chain, will close its doors for good, ceasing operations 1 March.

Mercure Vientiane’s hotel’s general manager and owner’s representative, Christopher Yeo, sent a letter to trading partners and clients late last year that was picked up by the Laotian Times in its news online 14 January.

Yeo was the general manager of the 172-room
hotel when it operated under an Accor Novotel brand franchise back in 1993 and
continued to lead the management team until now under the Mercure banner.

Heading for its last business day, 28
February, it will shut its doors for the final time 1 March.

Reliable sources believe the land lease is
running out and the landowner may have indicated he was not prepared to renew
the lease on the property and building.

Sensing the city’s hotel industry
investment value is shrinking land owners are looking at more lucrative options
when leases run down.

As for the future there is considerable
speculations, but so far the landowner has remained silent.

However, hotels in the Lao capital are
suffering a turndown in business as tourist arrivals fall and other
destinations such as Luang Prabang and Pakse are proving to be more popular.

Vientiane has more than 300 hotels and guesthouses and the arrival of the 200-room Crowne Plaza in 2016 put other hotels at the top-end of the market under pressure. Since then several 30 to 50-room boutique hotels have opened adding to the pressure.

In order to secure room and events revenue, those hotels with conference facilities, such as the Landmark, Don Chan and IHG’s Crowne Plaza, are engaged in a price war that filters through to hotels with smaller conference space such at the Lao Plaza the city’s first ever five-star hotel.

The highly competitive environment in the
city’s hotel market will continue following a recent IHG announcement
indicating it would manage a 250-room Holiday Inn that is under construction.
Both IHG properties are owned by BIM Group.

Commenting on the outlook, hoteliers admit they are forced to shave annual budgets to the bone. Corporate entertainment, seminars, parties and government sponsored conferences have dropped dramatically forcing the hospitality sector to adopt a survival game plan.

Fueling fears of more competition, Centara Hotels and Resorts, headquartered in Bangkok, reported last year that it has signed a management contract for a new COSI hotel, the group’s budget brand. A property that will carry Thailand’s Onyx group’s Amari brand is also in the pipeline.